Now, two months later, some Costco members say that major
problems remain — and that Citi, the card issuer, and Costco
aren't doing enough to fix them.

In addition to making Visa the only credit card customers can use
at Costco, the transition meant that 11 million of Costco's 81
million members worldwide with Costco cobranded credit cards had
to switch from the TrueEarnings American Express Costco card to
the Costco Anywhere Visa.

Initial issues ranged from general confusion to customers not
receiving their new cards to difficulty getting a customer
service representative on the phone.

Roughly 50 Costco cardholders reached out to Business Insider
with stories of their experiences regarding the transition. While
a handful described positive experiences, most were horror
stories.

But Costco members are saying the fix never came. Instead, many
say they've spent hours on the phone over the last two months
waiting to talk to customer service representatives.

"I am no longer a Costco member. The credit card fiasco is the
reason," Blaine Holbrook said in an email to Business Insider.

Holbrook said he called Citi and Costco four times in an effort
to get Citi to send his wife a functioning cobranded credit card,
but that never happened. Finally, Holbrook canceled his Costco
membership as well as all of his Citi credit cards.

Citi, which has taken the primary role in managing the transition
as the credit card issuer, maintains that the switch has been a
success, with nearly 900,000 new applications for credit cards.
The angry customers, according to Citi, represent a small
minority.

Persistent problems

REUTERS/John Gress JG/GN

The most common complaints from Costco members involved getting
the new credit card. Many said Citi mailed them unauthorized
cards, credit cards with incorrect member numbers, or simply
nothing at all.

Neikya Morris told Business Insider she made five calls to Citi
over two months in an attempt to get a Visa-Costco card. Morris
said both she and her husband were deployed to Afghanistan before
the issue was resolved.

"I was leaving for Afghanistan the next day and decided that I
had had enough of the foolishness and incompetency of this entire
process," she said in an email. "We are loyal customers of
Costco, so we continue to hold the membership, but we will
rethink this we when return home from our deployments."

Problems with automatic payments were another issue Costco
members reported to Business Insider. In a number of cases,
automatic payment setups failed — something some customers didn't
discover until Citi charged interest on unpaid balances or
canceled users' credit cards.

Ernest Garcia, from Amelia Island, Florida, said he was speaking
with Citi on the phone two to three times a week for the last
three to four weeks trying to figure out an issue with automatic
payments. The problem came to a head last weekend when his wife's
card was canceled, despite the company's promise that that
wouldn't happen.

"She was visiting family in Georgia and took them for lunch ...
she got the biggest embarrassment anyone could have in front of
all these people. She was told by the waiter that Citi/Visa had
cancelled her card," Garcia wrote in an email. "I have been a
customer since they were known as Price Club in the 1990s and now
Costco and I was getting ready to dump them … I'm retired and
life is [too] short to be going through this."

Other problems include confusion regarding Citi's website,
unexpected pending charges, and roadblocks for international
travelers. Certain payments made around the time of the
transition seem to have not transferred from American Express to
Citi, and other members expressed confusion about the card's APR.

No matter the cardholders' initial problems, long wait times to
speak with customer service representatives were a common source
of frustration. Some customers eventually hung up before they
could receive a response.

Several Costco members reported frustrating back-and-forths with
Citi via phone calls, text messages, emails, and mail, lasting
anywhere from several days to more than a month. More than one
Costco member said the confusion is ongoing and that they would
have to wait to receive their next credit card bill to see if
Costco had solved the issues.

Costco and Citi's successes

Tim Boyle / Staff / Getty
Images

From Citi's perspective, however, the transition has been a
success — and the company has data to prove it.

Citi told Business Insider that it has received almost 900,000
new applications for the Visa credit card since June 20.

The bank had anticipated some problems because of the magnitude
of the switch.

"With a conversion of this magnitude — one of the single largest
portfolio conversions in history (11 million cards) — and a brand
as beloved as Costco, call volumes were unprecedented," Jennifer
Bombardier, a Citi spokesperson, told Business Insider. "With a
portfolio of this size and eight months of pent-up demand during
which time we couldn't address questions on the new product or
existing accounts as the portfolio was with a different issuer,
the call volume was groundbreaking as of June 20."

After a few days of long wait times, however, Bombardier said
that Citi worked to address the problem.

"We have apologized for that inconvenience, and while we had
staffed up to prepare for the conversion, we swiftly took
additional actions to better meet the demand for the new cards,"
she said in an email. "Since then — average call wait times have
lessened significantly. For example, this weekend, average call
wait times were in the seconds."

While the average may have been just a few seconds,
Costco members told Business Insider they waited for
more than half an hour to speak to representatives last week,
after Citi erroneously sent emails to Costco members saying their
credit card accounts had been closed. (Citi said the incident
only affected a small percentage of customers.)

Costco has increased staffing in stores, with about 20 or more
employees at each location to help customers sign up for cards
and answer questions, Bombardier said. Citi similarly increased
staffing at call centers. It also& updated its FAQs with
information about the switch, and will not apply late fees for
payments on Costco accounts on or before the end of July.

A report from Lightspeed Financial Services Group, released in
late July, reveals that 5% of customers reported a negative
experience with Costco surrounding the new card launch. One month
after the new cards were issued, 80% of customers had used the
new card — an experience that 90% considered to be positive.

YouGov's Brand Index data similarly indicates that customer
perception of the retailer has been unchanged by the transition.

"We looked at Costco and Visa, and there is absolutely nothing in
the data that suggests anything like the 'disaster' this is being
portrayed to be," YouGov spokesperson Drew Kerr told Business
Insider. "It's not even statistically significant enough to even
merit a significant blip. The data is very accurate at this
point, having accumulated it daily."

Costco did not respond to Business Insider's request to comment
for this article.

The solution — if Costco needs one

Items from Costco's food court.Hollis Johnson

In the age of social media, when stories travel quickly online,
tales of bad customer service can carry a lot of weight.
Lightspeed began its report by noting that media coverage of
Costco's credit card transition was primarily negative — even if
most members didn't see it that way.

Costco is a retailer that
relies heavily on customer loyalty. Last year, Deutsche Bank
cited that loyalty as a reason Costco is "Amazon-proof." And it's
paying off now. Many Costco members critical of the credit card
debacle told Business Insider they would continue to shop there.

"It was poorly transitioned, but I think that big companies
always allow for fallout and I am sure would offer something to
draw the shoppers back in," Carol Whitaker, a Costco member who
encountered issues receiving a credit card, told Business
Insider. "It might be a nice gesture if Costco offered something
to all their customers as a sign of goodwill that they appreciate
their shoppers. Maybe someone should give that CEO a nudge on how
to treat his loyal shoppers. Even if it was a free apple pie it
would go a long way."